CHICAGO, Feb. 16, 2011 Zacks Equity Research highlights: The Walt Disney Company (NYSE: DIS) as the Bull of the Day and Hasbro Inc. (NYSE: HAS) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Lennar (NYSE: LEN), Fortune Brands (NYSE: FO) and Wal-Mart (NYSE: WMT).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
The Walt Disney Company's (NYSE: DIS) first-quarter 2011 earnings beat the Zacks Consensus Estimate, and rose 45% from the prior-year quarter, reflecting growth across Media Networks, Studio Entertainment, Parks and Resorts and Consumer Products.
Management hinted that for second-quarter 2011, advertising revenues at both ESPN and TV stations are trending up in the double-digits compared with the year-ago quarter, and added that the company is witnessing a rise in domestic hotel reservations by about 3%. Disney is also concentrating on the development of motion pictures under its brands Disney, Pixar and Marvel.
The company has also been actively managing its cash flows returning much of its free cash to shareholders. Our target price of $48.00, 18.5X 2011 EPS, reflects our Outperform recommendation on the shares.
Hasbro Inc. (NYSE: HAS) plans a shift toward strategic associations with Discovery, Universal Pictures, Electronic Arts and Mediaset, as well as aggressive penetration into emerging markets. However, most of its agreements will not materialize before late 2011.
We remain cautious on the stock due to increasing input costs as well as wage inflation, and currency fluctuation. Moreover, weaker-than-expected holiday sales left sufficient inventory on retailers as well as the company's books. This resulted in lower reordering from retailers, tempering first quarter 2011 outlook.
Although its dividend hike is a positive for Hasbro, Mattel is not far behind in this respect. Hence, we downgrade the stock from Neutral to Underperform.
Latest Posts on the Zacks Analyst Blog:
Homebuilder Index Unchanged (Still Awful)
The National Association of Home Builders (NAHB) Housing Market Index (HMI) was unchanged in February, holding at 16 for the fourth month in a row. The index is a "magic 50" index, where 50 is the dividing line between homebuilders seeing the conditions as been good and being poor. As such, 16 is an extremely weak reading.
The index is made up of three sub-indexes. The index tracking current sales improved by 2 points, but that only brought it up to a level of 17. The index that tracks sales expectations over the next six months rose by one point, to 25, while the index that tracks the traffic of potential homebuyers in the model homes was unchanged at 12.
If you want to hunt real hard for a silver lining, these numbers suggest that there was a little bit of improvement, but not enough to really make a difference. The HMI has been below the 50 line since the spring of 2006.
Housing starts have been extremely depressed -- not just relative to the bubble peaks, but in absolute terms. The weakness in residential investment was one of the things that caused the recession, and the lack of rebound there has been one of the key reasons why the recovery has been so sluggish and has not created the sort of job growth that one normally sees after a deep recession ends.
Every house built represents an enormous amount of economic activity and job creation potential. It's not just the carpenter that is working directly for Lennar (NYSE: LEN), or actually most likely a subcontractor, on actually building the house on site.
Building a house also includes using a lot of building materials, and so new home construction generates manufacturing jobs at firms like Fortune Brands (NYSE: FO) which makes plumbing fixtures and kitchen cabinets. There are also the spillover effects of the roofers having jobs, meaning more money in their pockets, so they spend more money at Wal-Mart (NYSE: WMT).
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
About the Analyst Blog
Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4582.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/ZacksResearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
SOURCE Zacks Investment Research, Inc.